How to start restaurant delivery
Which restaurant doesn’t ask how to start a restaurant delivery service from time to time? Starting food delivery is certainly a great way to reach a broader customer base and increase revenue
And whether you operate a fine dining establishment or fast casual locations, food delivery can open up new opportunities for your business. However, the success of your delivery service hinges on meticulous planning and execution.
In this article, we will guide you through essential steps and considerations every restaurant owner should bear in mind when embarking on the journey of launching and optimizing a food delivery service. Even if you have already launched delivery, you can use this as a checklist to see if it’s optimized to reach its full potential.
Let’s explore how to start restaurant delivery and exceed customer expectations, ensuring your restaurant stands out in the competitive landscape of food delivery!
Always start with Market Research
You never want to go into this blindly: you need to understand the market and, most importantly, your competition. This way, you can tailor your restaurant delivery to meet the specific demands and preferences of your local customer base, setting your restaurant up for success.
So, how do you go about this intricate process?
✅ Identify demand for food delivery.
- Conduct surveys, both online and offline, to understand the preferences and demands of your local customer base regarding food delivery.
- Analyze existing data if available, such as customer inquiries about delivery options or any requests for delivery service.
- Look at trends in your area – if there’s a growing population of busy professionals, students, or families, there may be a higher demand for food delivery.
✅ Check out your competitors.
- Identify other restaurants in your vicinity that offer delivery services. Consider both direct competitors and those offering different cuisines.
- Examine online reviews and customer feedback for competing delivery services to understand what customers like and dislike. Their disadvantages certainly can become your advantages! Pay special attention to reviews and feedback not only related to the timeliness of deliveries, but also to the ease of ordering and experience with the offered ordering methods and technology.
- Evaluate the delivery range of your competitors and their delivery hours.
- Examine pricing models, delivery fees, and any promotions or loyalty programs competitors may offer.
- Pay attention to the technology and systems competitors use for order management and delivery tracking.
- Assess the overall value proposition – what makes their delivery service stand out?
- Identify opportunities to differentiate your restaurant’s delivery service in terms of quality, speed, or unique offerings.
After the market research, look for opportunities to meet the demand of the key audience in your delivery area, but also to differentiate your delivery service from all the others, such as offering an interesting menu, special promotions, engaging loyalty program with unique rewards or innovative delivery options.
We will not delve too deep into this, since laws and regulations vary for different regions, but it is indeed a very important factor: you should be compliant.
✅Check local health department regulations for food delivery services.
✅Obtain any required licenses or permits for food delivery.
✅Ensure your restaurant complies with food safety standards.
For example, in the United States, specific regulations and compliance requirements vary by state and locality, and there are specific requirements for food safety, licensing, labeling and packaging, insurance, and there are also labor laws that regulate business’ relationship with delivery personnel. Make sure to thoroughly check what applies in your state or country.
Choose your Restaurant Delivery Model
“Should I use in-house delivery staff, or partner with third-party delivery services like Uber Eats, DoorDash, or Grubhub? Or combine both methods?”
That’s a burning question for everyone who starts delivery service, and in fact the one that can define your restaurant’s fate for the future.
At the first glance, Third-party delivery seems to be the way to go. You don’t need to manage an in-house team, you utilize existing delivery infrastructure, and you gain exposure on popular delivery platforms, reaching new customers.
But do these advantages outweigh the disadvantages and potentially huge losses for your business?
The economics of working with delivery aggregators don’t make sense
But it’s not only about potential losses: it’s also about brand control. It’s not only that your brand will be represented alongside competitors on the delivery platform – you have no control over the delivery process. But the way the food is delivered will be viewed as your brand by your customer. Can you trust a third-party to control the image of your brand, to make an impression?
At the same time, your access to customer data is limited. You can’t have direct communication with the customers and build direct relationships, you lose marketing and customer engagement opportunities.
From the business perspective, In-House Delivery makes more sense.
✅ It gives you control: Having your own delivery team provides greater control over the entire delivery process, from order fulfillment to customer interaction.
✅ It’s good for branding: In-house delivery allows you to extend your restaurant’s brand directly to the customer.
✅ It enhances customer engagement: Direct contact with customers enables better communication and the opportunity to build customer loyalty.
Of course, there are some things to consider in advance when launching in-house delivery:
❓Initial Investment: There will be initial costs for hiring and training delivery staff, as well as for obtaining and maintaining delivery vehicles, however, it won’t match the lifetime commissions from the third-party services if you become dependent on them for online sales.
❓Logistics: Managing a fleet of delivery vehicles and staff requires logistical coordination and planning.
❓Variable Costs: Costs may vary based on factors such as fuel prices, vehicle maintenance, and insurance.
When considering costs, it’s important to understand that delivery services can significantly increase revenue by reaching new customers, and a reliable and efficient delivery model contributes to positive customer experiences and increased customer loyalty. If you manage to form that ordering habit, the customer lifetime value will increase and cover all the additional costs associated with delivery!
To stay flexible and reach a broader audience, many brands use the Hybrid Model – combination of In-House and Third-Party delivery. Being on delivery platforms is good for customer acquisition, and Third-party services can be strategically used during peak times or for specific promotions while maintaining control over regular deliveries.
However, coordination between in-house and third-party delivery systems requires various integrations, otherwise it will put a huge workload on operations, and something might slip through the cracks. It’s better to use a POS system that is integrated with third-party aggregators, and also allows to easily outsource in-house orders to third-party drivers.
Ultimately, the choice between in-house delivery, third-party services, or a hybrid model depends on your restaurant’s specific needs, resources, and long-term strategy. Regularly evaluate the performance of your chosen model and be open to adjustments based on market trends and customer feedback.
Create the “gold standard” ordering channel
Nowadays, it’s not enough to just have an operator on the phone to accept orders, or even launch an ordering website that checks the box of having an online presence. To really stand out and compete in the always evolving, fast-moving market, your ordering user experience should be consistent, comfortable, and even pleasant to use.
A combination of a website and a mobile app is what has proven to do wonders over the years, with a focus on mobile-first approach, as it is the most reliable channel for reaching your customers with marketing offers.
But first, let’s take a look at what’s required to have an online ordering channel (be it a mobile app or a website) that is up to modern standards:
✅ The interface should be simple and intuitive, and allow customers to easily navigate through the menu, make selections, and complete orders. Preferably without them having to confirm their phone numbers, remembering passwords and all that – and it’s even more preferable if they don’t have to create an account at all. Provide value upfront!
✅ The ordering platform you integrate to your channels should be secure and reliable, not to let you down when it matters most. Also, if you provide combos or meal options, native support for such items is preferable, as any workarounds may make it more difficult to use for the customers, hindering the promotion of such items.
✅ Show, don’t tell – the menu must be accessible and visually appealing. Include high-quality images, detailed descriptions, and options for customization (e.g., adding or removing ingredients).
✅ Upsell with relevant suggestions should be implemented at checkout to increase your profits and provide personalized customer experience.
✅ One-click / repeat order functionality is a must for forming the ordering habit.
✅ It’s best to integrate it with the POS system to streamline order processing and inventory management. Also, a “nice to have” is to integrate the online menu with your stop-lists (for each restaurant location if you have several locations – based on the customer’s chosen address and delivery zone) so that the mobile app and website reflect that and don’t let the customer order something that you can’t provide. It helps avoid customer frustration a lot.
✅ The payment option should offer a variety of secure payment methods, including such popular options as Apple Pay and Google Pay, and other popular payment options in your area. Ensure that your website has Secure Sockets Layer (SSL) certification to encrypt customer data, especially during the payment process.
✅ The delivery zones should be clear – and you should let the customer know that you don’t deliver to their address before they go to checkout, not after.
✅ Update your customers about their order status in real time, from confirmation to preparation to delivery.
✅ Clearly display contact information for customer support in case customers have questions or issues with their orders.
It’s important to have detailed control over the delivery status for each location and timelines you provide to the customers. And, of course, your ordering channels should regularly be maintained: check for broken links, update content, and ensure that the online ordering system is functioning smoothly.
Does it seem overwhelming already? It certainly is difficult – and very costly – when you create all of it from scratch. Luckily, there are ready-made e-commerce solutions, like LoyaltyPlant, that provide everything you need to launch a successful ordering channel. In our case, it’s not just ordering – it’s loyalty and marketing as well, all-in-one, which is really important for your direct ordering channel success, and if you want to stand out from the competition.
Make your ordering channel a preferred option
We see that all the time: the restaurant implements everything up to this point, and then the management thinks that it will be enough for the online orders to bloom. In reality, it is only the first piece of the puzzle.
So there’s no wonder if you are not overflowing with orders if you have not put the other pieces in place.
To simplify it, we love to present everything that is required for success as 9 essential pieces to ensure your ordering channel really generates orders:
Want to see more details about each piece? Check out our deck about breaking free from the aggregators – we cover it with real-life examples.
Or, to understand which channels to use to promote your ordering channels, and how to prioritize them, I recommend checking out this article – it has action items you can start applying right away!
Prioritizing is key when investing into delivery service promotion
Control the restaurant delivery quality
It’s important to consistently control the quality of food during preparation and transportation. There is general advice that you can apply to make sure the delivered order is up to the standards:
✅ Use insulated packaging to help maintain the temperature of hot or cold items during transportation. Package food securely to prevent spills or leaks during transit. Consider using packaging that separates different components of a meal to maintain freshness and prevent sogginess. This is crucial for ensuring that the food arrives in the best possible condition. Consider eco-friendly packaging options that not only contribute to environmental sustainability but also maintain the quality of the food.
✅ Train the delivery staff and provide clear guidelines on how to handle different types of food items. This includes instructions for keeping food at the right temperature and ensuring proper handling to avoid spills or damage. Train delivery staff to handle customer interactions professionally, addressing any concerns promptly and courteously.
✅ Implement quality assurance checks: Conduct quality checks on all orders before they leave the restaurant to ensure that the correct items are included, and the food meets quality standards. Implement a system of random spot checks on delivered orders to assess the quality of the food upon arrival. Use this information to continuously improve the delivery process.
To continuously improve, it is vital to gather customer feedback for each order. And it is not only about improvement – when you ask for feedback directly after each order, it allows customers to share their opinions privately and not publicly, reducing the risk of negative reviews on public platforms.
Customer feedback provides valuable insight into their experience, identifying areas for improvement and helping to maintain quality standards. Responding to feedback with personalized and efficient resolution of customer complaints or issues only improves customer satisfaction and reduces churn rates.
✅ Implement tools for collecting service ratings within your ordering channels and provide a user-friendly interface for customers to share their feedback.
✅ Use feedback data to identify areas for improvement and implement changes to address customer concerns.
To really keep going with restaurant delivery, you always have to track the results of the service: KPIs related to delivery, revenue, “dead hours”, promotion types that generate best conversion, types of customers and their LTV, etc. Regularly analyzing this data empowers you to make data-driven decisions, optimize operations, and continually enhance the overall delivery experience for your customers. It can also help you invest into things that really work, and cut the costs on something that doesn’t matter after all.
It also applies to the technical aspects of your ordering channels: you need to be able to see where most of the customers who didn’t convert to order stopped their customer journey, identify areas of customer frustration, and fix it as soon as possible for the users to have a smooth and seamless ordering experience. Any conversion-killer could be detrimental to your revenue!
With LoyaltyPlant it’s easy to keep track of the data that matters most
So what now?
We have laid out some key factors that answer the question of how to start restaurant delivery. Of course, it doesn’t end there: there are many aspects to consider, depending on your restaurant type, business model, location, and other factors. But this is a reliable foundation that you can base your plans off.
It might seem overwhelming – but we’ve got you covered: from ordering to loyalty with marketing, LoyaltyPlant has all the tools you need to successfully launch your ordering channels. We have already thought through every detail to make the process much easier for you. So if you don’t know where to start when it comes to your digital channels, drop us an email on firstname.lastname@example.org – we’d be happy to chat!